In 1709 (or was it 1710?) the Statute of Anne created the first purpose-built copyright law. This blog, founded just 300 short and unextended years later, is dedicated to all things copyright, warts and all. To contact the 1709 Blog, email Eleonora at eleonorarosati[at]gmail.com

Sunday, 31 January 2010

Last Wednesday the US First Circuit issued this judgment over an intriguing moral rights question. It concerns Training Ground for Democracy, an elaborate installation piece by Christoph Büchel at the Massachusetts Museum of Contemporary Art. The work was being constructed by a team who were following instructions emailed by the artist. Museum and artist fell out but the Museum continued work on the piece and went ahead with exhibiting it. The First Circuit, reversing a district court's summary judgment, held that it was open to a jury to find that:

1. continuing to work on the piece in a manner that was contrary to instructions infringed the artist's moral rights.2. the Museum had violated the artist's right to publicly display.

The moral right in question is the right of integrity (right to prevent intentional modification of the work that would damage the artist's reputation). Somewhat discomfortingly, those who were hired to modify the work are now being sued for modifying the work...

IP litigators, bound to adopt a serious tone on behalf of their clients, may envy the tenor of the recent letter before action on behalf of The Eagles' Joe Walsh to Republican Congressional candidate for Illinois, Joe Walsh. According to Billboard Joe Walsh (candidate) has co-opted the song "Walk Away" by Joe Walsh (musician and songwriter) - albeit with new lyrics - for use in his (Joe Walsh's) election campaign.

Confused? Peter Paterno, The Eagles' Joe Walsh's LA-based lawyer thinks you might be. Or as Paterno puts it in his letter to the the candidate: "Given that your name is Joe Walsh, I'd think you'd want to be extra careful about using Joe's music in case the public might think that Joe is endorsing your campaign, or, God forbid, is you."

Paterno then goes on to tell Joe Walsh a thing or two about US copyright law: "It says a lot of things, but one of the things it says is that you can't use someone else's song for your political campaign promotion unless you get permission from the owner of the copyright in the song. As far as we can tell you didn't do that. Maybe you got so busy with the campaign that you just forgot. But that's not OK.

"Second, under that same United States Copyright Act, you're not allowed to take someone's song and change the lyrics. This is not to say you're not allowed to write silly lyrics, you just have to write them to your own music. Now, I know why you used Joe's music -- it's undoubtedly because it's a lot better than any music you or your staff could have written. But that's the point. Since Joe writes better songs than you do, the Copyright Act rewards him by letting him decide who gets to use the songs he writes."

On January 28th, Joe Walsh wrote an open letter in reply to Peter Paterno about Joe Walsh, which, while emphasising how much Joe Walsh would like to "sit down" with Joe Walsh, included such gems as "first, I am a political candidate, not a rock star (though always dreamed of being one)" and the reassurance that " to be honest, and I mean no disrespect, I am not in this race to win the approval of a Hollywood entertainment attorney." Charming. Joe Walsh goes on to say: "Peter, I have to say that I’m surprised you and Joe Walsh (the rockstar) even made an issue of this. I encourage you and everyone else who is learning about this in the media (because, again, that’s where we first learned of it!) should go watch the video and determine for yourself what it’s all about. I must admit, I’m beginning to think that because I’ve been out there for a few months as a “tea party conservative” candidate, all you liberals out in Hollywood are using this to attack someone whose beliefs you don’t understand and always disrespect (can you say Sarah Palin?). "

Friday, 29 January 2010

Australia's Federal Court is expected to fast-track a decision in a case brought by AFACT (the Australian Federation Against Copyright Theft) on behalf of a consortium of film and TV companies against the Australian internet service provider iiNet. The case centres on the ISP’s liability for illegal file-sharing committed by its customers. AFACT are suing for damages, and want iiNet to be forced to disconnect any customers it knows are illegally sharing music online. In France and Taiwan a ‘three strikes’ law is already in place and in the UK a similar regime is planned as part of the new Digital Economy Bill which Culture Secretary Ben Bradshaw believes will become law before the next election. Controversy still surrounds the role of ISPs and mobile companies in regulating their customers illegal activities, and in the UK Talk Talk’s boss Charles Dunstone has said he might fight the three-strikes law in court if his lobbying efforts to stop the anti-piracy system becoming law fails.

In all the countries where the new system is in place it has been brought in by the legislature, although in the US MGM v Grokster held that those who induce infringment are liable for the resulting acts of infringement by third parties. In Australia it seems that the content industries are looking to a civil action, hoping that a successful action against an internet provider over the issue will set an important precedent – which the legislature could then formalize. There is ,of course, no guarantee that the claim will succeed. In the UK the BPI have been hesitant to take a civil law action against the organisers of the Oink file sharing service, accepting a case would probably have to go to the Supreme Court for a final ruling. Indeed criminal charges against founder Alan Ellis failed in the Crown Court and a recent claim by the IFPI against Baidu in China for providing links to infringing sites failed in the Beijing No. 1 Intermediate People's Court.

AFACT and iiNet had both presented their arguments in court last October and a ruling on the matter was not expected until later this year. However it was announced yesterday that a judgment will now be made next Thursday. Following the court hearings last Autumn, iiNet's CEO Michael Malone told reporters he was confident his company would win the case, saying: "We do not, and never have supported, encouraged or authorised illegal sharing or downloading of files in breach of the copyright laws". Even if iiNet win, it is likely the government will give some time to reviewing copyright rules, which might result in a three-strikes system being introduced in all events - although I imagine Australian ISPs and mobile companies will be as vocal as Dunstone has been in the UK, telling reporters that if the Digital Economy Bill does become law his company will refuse to send out warning letters and will consider "all options" for challenging three-strikes through the courts saying "I think there is a problem if an industry thinks its business model will be saved by legislation. While the music industry focuses on getting these laws through, it won't be concentrating on reinventing its business - which it obviously needs to do as its model is out of date. Its customers have gone on strike and turned to piracy because the old model doesn't work. There is no need to pursue this letter-sending and disconnection policy, when [record companies] can just individually prosecute people who have violated copyright rules".

Wednesday, 27 January 2010

I have to say that from a personal UK perspective I find the damages awarded by US juries in both the Joel Tenenbaum and the Jammie Thomas-Rasset file swapping cases extraordinarily high. That the two defendants were unlucky enough to get caught in the first place and then perhaps foolish enough not settle was bad enough. To then face damages of $675,000 and $1.92 million respectively seems somewhat harsh, to say the least. The sums awarded to the record industry are also, it would appear, wholly unrealistic and will never be paid. Tenebaum, a student, made it clear that he would (pending an appeal) probably seek bankruptcy protection and single mum Thomas-Rasset made it clear she didn’t have the nearly two million dollars sum lying around to pay the labels. That said, the awards fell well within the statutory tariffs set by US law. Tenebaum’s appeal, which is still ongoing, prompted a filing from the The US Department of Justice defending the $675,000 damages award arguing that Tenenbaum's actions caused "great public harm" saying "In establishing the range [of copyright damage amounts: $750 to $150,000 per infringement], Congress took into account the need to deter the millions of users of new media from infringing copyrights in an environment where many violators believe they will go unnoticed" and the DOJ filing notes "The harms Congress sought to address, moreover, are not negated merely because an infringer does not seek commercial gain. Accordingly, the statutory range specified by Congress for a copyright infringement satisfies due process."

Now a US judge has intervened in the Thomas-Rasset case and whilst Judge Michael Davis rejected the defendant’s request to reduce the fine to the legal minimum of $18,000, he did cut the award by ninety seven percent to about $54,000. What’s significant is that the decision did not make any ruling on points of law, but rather adjusted the amount to what the judge considered an appropriate penalty. Judge Davis, chief judge for the U.S. District Court for the District of Minnesota, said the original fine was “monstrous and shocking” and that the new amount was more appropriate, being “significant and harsh” but at an appropriate level to act as both punishment and deterrent, with Judge Davis saying that that a jury acted irrationally in deciding upon the size of an award, perhaps a first in a copyright case.

Despite what many might consider to be a ‘victory’ over the Recording Industry Association of America, Thomas-Rasset’s doesn’t seem very impressed with the result and one of her lawyers told reporters that the reduced amount was like “the difference between Joseph Stalin and the Khmer Rouge” and that they are still considering a constitutional challenge using the argument that the law itself is unfair. There is also the possibility of a further challenge by the Recording Industry Association of America which may argue that the judge had no right to use remittur in the case. That said, the RIAA seem to be stuck between a rock and hard place – the possibility that bringing appeal might generate yet more bad publicity – but to accept Judge Davis decision might set an unwanted precedent.

Earlier this year it was impossible to escape from the snow. Not only was it lying on the ground outside or falling from the heavens above but websites and newspapers were full of photos of the stuff which illustrated in equal measure the picturesque nature of snow, the fun millions of people had in it whilst they bunked off from work (I mean, were snowed in) and the annoyance it caused to the poor souls who got trapped in or had to abandon their cars.

Peter Zabulis took a snow-related photo of the picturesque variety. On 3rd January he uploaded the picture, of tyre tracks etched across a snow-covered field, onto Flickr and tagged it as having "all rights reserved". You can see it here.

Imagine Peter's surprise when, on 5th January he visited the Independent's website and found his photo being used in a section showing photos of snowbound Britain, without his consent. He complained to the paper and since he didn't initially get the answer he desired, he put all of the correspondence between the paper and himself on a separate Flickrpage entitled "Breach of Copyright - the Independent".

The correspondence makes interesting reading. The Independent stated that it had not copied the photo. Instead, it had taken a photostream from Flickr and incorporated it into the Independent's website via an API (an application programming interface, more about these here). Effectively the Independent had provided its readers with a sophisticated link to Flickr which, rather than making the reader leave the Independent's website to view the photos, enabled readers to view the Flickr photos from the Flickr website whilst remaining on the Independent's website.

The Independent's initial reply signed off with "We did not take the photo from Flickr, nor present it as anything other than as it is shown there. I do not consider, therefore, that any copyright has been breached or any payment due". However, the matter was eventually resolved with payment being made by the Independent to Peter.

Whilst it does seem likely that the paper breached the Flickr terms of use and shouldn't have used the photo without Peter's consent, 1709 is interested to know whether any of its readers think there was an infringement of Peter's copyright. No copy was made, but had the Independent's website communicated the work to the public?

If there was no infringement of copyright it seems to 1709 that a potential loophole may exist here. The implication would be that a website could incorporate works in which copyright exists from another website via an API without permission from the copyright owner, without infringing any copyright. In some cases this may not be a problem (for example where the owner of the works is happy for them to be distributed as widely as possible), but if the "incorporating" website is generating (for example) ad revenue the "incorporated website" may have objections and may wish to enforce its rights.

1709 is especially interested in this subject because last night it was told (by a reputable source) that the three initials "API" were going to be very important in terms of Internet developments over the next few years, so one could expect issues such as this one to become more widespread.

This story was flagged to 1709 in yesterday's Guardian, in an article about the merits of the current copyright regime. You can read it here (note that the Guardian was careful not to use a copy of Peter's photo) and make your own mind up as to whether you agree with the views of the author of that piece.

One can only imagine that appropriation and use of photos which are in the public domain is a fairly common issue nowadays. In fact, the first comment this morning under the story in the Guardian is from a blogger who had his photos used (without consent) by amongst others the Daily Record. You can read more here.

Amit Jamsandekar has just sent me a copy of the judgment of the Division Bench of the Bombay High Court, which last week decided an important issue relating to the jurisdiction of a civil court in matters relating to compulsory licensing of sound recordings for broadcasting. The Single Judge of the Bombay High Court in Music Choice India Pvt. Ltd v Phonographic Performance Limited, MIPR 2009(1)329; 2009(111) Bom LR 609 held that the jurisdiction of the civil court to deal with such matters was barred by Section 31 of the Copyright Act 1956, which conferred jurisdiction to deal with compulsory licences upon the Copyright Board. The Single Judge further held that a civil suit for injunctive and declaratory relief pending an application for a compulsory licence was not maintainable in the civil court.

This judgment was challenged by Music Choice India Pvt. Ltd and the Division Bench, having heard the appeal, has now confirmed the view taken by the Single Judge.

You can read the decision of the Single Judge here and the ruling of the Division Bench here.

Tuesday, 26 January 2010

On the one hand, a Chinese court has decided that search engine Baidu has not infringed copyright by providing links to illegal music file-sharing – Ars Technica reports here.

On the other hand, in Italy a new law may be giving ISPs and websites liability for third-party content, Reuters reports here. I think this must be the implementation of the Audiovisual Media Services Directive? It would seem to simultaneously unimplement the E-Commerce Directive...

Friday, 22 January 2010

Via International Law Office comes a note by Ives Jadraque (Grau & Angulo) entitled "Murcia Court of Appeal Decision on Conduct Through P2P Networks". This describes a decision of that court last September as to whether the creation and administration of a website can be a criminal offence under Article 270 of the Criminal Code. The website in dispute here was www.elitedivx.com, which facilitated peer-to-peer file-sharing. While the trial court considered the provision applicable, the Murcia Court of Appeal took the opposite view. Comments Ives Jadraque:

"The appeal court gave no clear guidance on whether providing links to P2P systems with the aim of making a profit is a crime against intellectual property, stating only that "the conducts that are carried out through [P2P networks]" can be considered as a crime against intellectual property. The question is thus whether the conduct carried out by the defendants can be considered as having been carried out through P2P networks.

Decisions on the possible criminal nature of providing access to P2P platforms are contradictory. The September 30 2009 Alava Court of Appeal decision in the Infektor Case considered that such conduct can constitute a crime against intellectual property. Conversely, the September 11 2008 Madrid Court of Appeal decision in the Sharemula Case (referred to by the Murcia Court of Appeal in this case) declared that such conduct cannot be considered a criminal offence.

The decision is important because it expressly refers to the possible criminal nature of exchanging files through P2P platforms, stating in particular that such conduct implies reproduction and public communication (Article 270 of the Criminal Code) whenever that conduct causes detriment to a third party's rights (a feature of P2P exchanges, according to the appeal court) and has a profit-making aim.

The appeal court's considerations on the requirement for a profit-making aim, established in Article 270, are remarkable. The court considered this requirement to be fulfilled on account of the profit obtained by the defendants from the adverts on the website. This interpretation differs not only from that of the Cartagena Criminal Court, but also from other recent case law, where profits were also obtained from adverts. In these cases it was established that there had been no profit-making aim because such benefits were not directly linked to the provision of access to P2P networks".

The report says that consumers perceive counterfeit optical discs (CDs and DVDs) as illegal and suppliers as motivated by profit. For online P2P file-sharing, the perception of legality is ‘ambiguous’ and suppliers are believed not to be motivated by profit. This divergent perception is interesting because a significant percentage of consumers are put off buying counterfeit discs because of perceived links with organized crime.

Are the public perceptions founded on fact? It is well established that counterfeit discs are produced and distributed by organized crime groups with a profit motive (e.g. Asian triads, yakuza and the Mafia). Copyright crimes are low-risk and lucrative, complementing portfolios of other criminal activities ranging from narcotics and weapons trafficking to contract killing and prostitution.

Is illegal P2P file-sharing utterly different? In some ways yes, but there are criminal dimensions that should not be ignored. Firstly, for some participants P2P (or The Scene, the hard core which provides much of the content) is a commercial activity and/or one that is big enough to damage right owners’ interests, so they are potentially committing a criminal offence under s. 107 (2A) CDPA. Secondly, it appears that online piracy is the main source of content for counterfeit discs. This is evidenced by the fact that within hours of a film being uploaded to a top site it will be being sold as a disc on the street. So these two worlds of criminal offline and innocent online are not necessarily so separate as they might at first seem.

The Government is keen not to identify the Digital Economy Bill as relevant to criminal offences – it does not wish to criminalize ordinary people. Some ordinary people, however, might find P2P more off-putting if they knew that the distribution network (a) involves criminal activity (under copyright law) and (b) has a relationship to criminal activity of a less virtual kind.

Wednesday, 20 January 2010

Writing for the ever-informative TorrentFreak, Ernesto brings news ("Pirate Bay’s Ipredator VPN Opens To The Public") describes how the Ipredator anonymity service offers, for just 5 euros a month, a virtually private network (VPN) through which users can conceal all their internet traffic, naturally including torrent downloads, from any curious third parties who might be wanting to spot their downloading activities. He writes:

"In the last year, pressure from the entertainment industries on ISPs and governments to crack down on copyright infringers has steadily increased, resulting in ISPs sending out mass copyright warnings. This, of course, is coupled with the looming specter of three-strikes legislation aimed at disconnecting copyright infringers.

... Users of BitTorrent and other file-sharing networks have increasingly turned to solutions that hide their identities from the outside world, rendering these new anti-piracy initiatives useless. The IPREDator service from the founders of The Pirate Bay opened up to the public this week, and is undoubtedly the most talked about newcomer in this business.

With a beta launch coinciding with the introduction of the controversial IPRED law in Sweden, the service promised to offer users an anonymous connection to the Internet. IPRED gave the copyright holders increased power to track down pirates, and with the launch of IPREDator the creators neutralized this new ‘threat’.

... Ipredator allows users to connect to the Internet while hiding their own IP-address. The interest in services like this is booming. In Sweden alone, an estimated 500,000 Internet subscribers are already hiding their identities online, and that number is expected to rapidly grow in the new year.

... we were told by former Pirate Bay spokesman Peter Sunde that contrary to what the legal page states, no logs of any kind are kept by Ipredator.

...While Ipredator owes its name to the IPRED legislation, the team behind it is also working to crush the Swedish wiretapping law (FRA) that was introduced earlier. Sunde explained in a recent writeup how they are planning to not only encrypt the connection between individual users and the VPN, but also the entire stream of outgoing data from the VPN until it has passed Sweden’s borders. ...".

How strange it is that, whereas only a couple of short decades ago, the copyright industries were pinning their hopes on technical devices and solutions as a means of protecting their works against unauthorised users, now it's the unauthorised users that are pinning their hopes on increasingly sophisticated technical means of protecting their freedom to copy against the predations of IP legislative enforcement.

Usually your own work is the last thing you’d worry about copying but Burrows v Smith, a Chancery Division judgment published today, reveals the pitfalls. Burrows is a computer games designer who came up with a game in 1998, recording it in a document. In 2005 he became an employee of Circle Studio Ltd and designed a game called Traktrix. Unbeknowst to Circle, Traktrix embodied elements of the 1998 game. Burrows was copying his own work! Circle subsequently went into liquidation and Crush Digital Media bought some of its assets.

Burrows argued that he’d given Circle an implied licence to use the 1998 document but the licence had been terminated when Circle went into liquidation and could not be assigned to Crush. Norris J held that the 1998 document was not incorporated into Traktrix consensually, so there was no licence but an assignment (if it had to be categorized).

"Do you find copyright law as confusing as figuring out which glove goes on which hand? If you do, then have I got the invention for you! I present to you now the Copyright and Copyleft gloves. With their unique integrated design, the Copyright and Copyleft Gloves both enable you to quickly differentiate left from right and familiarize yourself with the ongoing intellectual property debate. Never be confused again!

Make your own today! This project is in the Public Domain".

The site then provides a set of instructions for those who wish to make them. They're easy enough to follow, but you'll need a Singer Futura sewing machine ...

The IPO website draws attention to a reference to the European Court concerning Article 5(2)(b) of the Copyright Directive (which allows national laws to create a private-copying exception so long as rightsholders receive fair compensation). The question:

“Does Directive 2001/29/EC, in particular Article 5(2)(b) and (5) thereof, provide any assistance in determining who should be regarded under national law as owing the 'fair compensation' referred to in Article 5(2)(b)? If so, what assistance does it provide?

In a case of distance selling in which the buyer is established in a different Member State to that of the seller, does Article 5(5) of Directive 2001/29/EC require national law to be interpreted so broadly that a person owing the 'fair compensation' referred to in Article 5(2)(b) of the directive who is acting on a commercial basis owes such compensation in at least one of the Member States involved in the distance selling?”

Dutch law (see Article 16c) has a private-copy exception provided that the author receives remuneration from the manufacturer or importer of the object on which the recording is made. Foundation ThuisKopie collect and distribute this remuneration. In this action they sued the German company Opus, a supplier of blank media, who sell into the Netherlands but are paying a comparable fee under German law.

Friday, 15 January 2010

The trial of the Alan Ellis, one of the main people behind the infamous ‘Oink’ Peer-2-Peer invite only file swapping site, has ended at Teeside Crown Court. The file-sharing community had just under 200,000 users when it was closed down in 2007, who between them had downloaded some 21 million illegal songs. Six men were arrested in raids in the UK and Amsterdam, four of whom pleaded guilty to copyright infringement in late 2008, receiving community service and fines for their crimes. Two cases remained and the first heard was against Ellis, aged 26, who founded the community. He was charged with conspiracy to defraud. Ellis had denied liability for copyright infringement, using the (classic) defence that the Oink website and server did not, in themselves, host any unlicensed content, saying that it merely provided a forum through which others could share music.

As the case centered on an accusation of fraud, and prosecutors also had to prove Ellis made a profit and prosecutors moved to show the amount of money made by Ellis by operating the venture. It appeared from evidence given that there wasn't a subscription fee as such for using Oink, but users were encouraged to make donations, and it's alleged that a donation was compulsory whenever someone wanted to invite a friend to join the community.

Prosecutors said Ellis had amassed $300,000 in donations in his PayPal account by the time site was shut down and was receiving about $18,000 each month in ‘donations’ – and that he had £20,000 in his bank accounts. Ellis insisted that the monies were to pay server costs – and possibly buy a new server - and that he, unlike the Oink’s actual users, wasn’t personally guilty of infringement, because he didn't personally host or share any infringing content. By way of an aside, in the US in MGM v Grokster a charge of what was in effect 'authorising infringement' was successfully brought and in Sweden the four men behind The Pirate Bay were found guilty of copyright infringement. However, Ellis painted a picture of Oink as geeky student programming project that got out of control. He told the court how he created the website while studying at Teesside University and in a short period afterwards, mainly because he felt the programming skills he'd been taught were outdated and that he should endeavour to teach himself some up to date web-based programming saying "I didn't have an intention, I was furthering my skills as a programmer, as a software engineer".

Well, we can report the verdict - and in this case Mr Elllis has been found NOT GUILTY. He left court without speaking to reporters.

A meeting of BLACA last night considered the question of ‘what is a substantial part?’ in the light of the ECJ’s Infopaq judgment last year, where it was held that:

‘An act occurring during a data capture process, which consists of storing an extract of a protected work comprising 11 words and printing out that extract, is such as to come within the concept of reproduction in part within the meaning of Article 2 of Directive 2001/29, if the elements thus reproduced are the expression of the intellectual creation of their author; it is for the national court to make this determination.’

Lionel Bently lamented this decision, which he believes is revolutionary in a bad kind of way because the simple test lacks the subtlety of English law. Lord Hoffmann, by contrast, thought nothing had changed: Infopaq perfectly matches the existing English approach. Lord Hoffmann, it might be observed, has demonstrated a distaste for obscure ancient case law and a knack with Occam’s razor (paring down interpretation of contracts in Investors Compensation Scheme and patents in Kirin-Amgen).

Is it possible, however, that some of the historic judicial approaches to substantiality may not have been rendered entirely redundant in determining the potentially complex question of whether a copied part includes ‘expression of intellectual creation’ (a phrase that gathers together a roomy collection of abstract concepts)? Of those previous judicial considerations that are no longer relevant, how many can we not live without – or have already been put out to grass?

Thursday, 14 January 2010

Google’s threat on Tuesday to pull out of China on human-rights grounds coincided with Google cancelling the next stage in talks with the China Written Works Copyright Society over copyright infringement. Are there Chinese walls between these two episodes?

Google sent some kind of apology to the CWWCS on 9 January – although apparently only for poor communication. According to the CWWCS a bigger apology was anticipated: ‘Google was supposed to apologize for its infringement, provide a final list of Chinese books it scanned, and fix a timetable for copyright issue settlement during the talks during Tuesday's talks’ (People’s Daily Online). Although it would be too much to suppose that the books dispute is the sole cause of Google’s human-rights stand, perhaps the timing is relevant? Google has saved itself from admitting copyright infringement – which would have undermined Book Search and the Settlement globally.

Wednesday, 13 January 2010

I read with interest a blog written by Willian Patry, a senior copyright lawyer with Google (although his blog is completely independent from his employer), about how the actions of a certain major film studio have driven him to cancel his Netflix subscription. You can read his blog here.

Netflix is a US subscription service which is broadly equivalent to the UK's Lovefilm service and offers DVD and Blu-ray disk rental by mail. If you sign up to a monthly subscription plan one of the great benefits is that no late fees are payable, no matter how long you keep a DVD (provided you return it before your subscription expires!).

According to Patry, Netflix agreed with Warner to a 28 day embargo on renting the latest movies, in exchange for reduced DVD purchase costs. As a result Patry has cancelled his subscription and observes that "Netflix's new business model is, apparently, the old business model of businesses first, consumers last". Patry also adds that "I expect the new business model will also be bad for Netflix and the studios. Instead of watching movies, I will do something else.".

It seems to me that the deal could also have another unintended effect. Old business models do not legislate for the advent of high-speed broadband, the ubiquity of pirate sites and the ease and speed with which infringing content may be viewed online. If consumers know that content is available legitimately in one form or other (in this case via physical sales of DVDs) but cannot obtain such content when they want it or how they want it (in this case via download, streaming or rental of a physical copy), surely they may be driven towards illegal sources. Piracy is so rife that in any event one may expect a distribution strategy to involve making it as easy as possible for consumers to obtain a legitimate copy of the content, via as many mediums as possible. Warner seems to have chosen the reverse strategy.

This comes as a surprise because Warner are leading the move towards day-and-date VOD releases and are generally seen as quite innovative, all of which makes their arrangement with Netflix more puzzling. However, we must assume that the economics work in each party's favour. See here and here for two examples of WB taking the lead on distribution strategies.

South Korea provides an interesting case study. In South Korea 95% of households have a broadband connection, making it the most "connected" country in the world (source here), and it also has some of the fastest broadband speeds in the world, with speeds of 49.50 megabits per second (source: "Speed Matters" report released by CWA in August 2008 as quoted by USA Today, 20th August 2009). In 2008 Warner Bros., the last major studio to have a home video and DVD unit in Korea, withdrew its operations. Its move was seen to cap a steady withdrawal of Hollywood studios' home video and DVD units, hurt by the slowing sales and continued illegal downloading of videos on the Web. "The Korean video and DVD Market was valued at 100 billion won in 2003 but began to decline in 2004, undermined by the growing availability of online download services, many of which were illegal. In 2007/8, the home video and DVD market was estimated at 56.9 billion won" (source: The Korea Herald, 12th November 2008).

The author previously commented on this blog about Clause 17 of the Digital Economy Bill which proposes sweeping powers to amend copyright law to deal with new internet piracy problems, including, for example, allowing the government to create a range of new copyright exceptions in order to reduce infringement by legitimising formerly infringing activities - or conversely, a new series of rights for copyright owners.

Following complaints about the breadth of the powers, last night Lord Mandelson published a series of amendments to Clause 17, seeking to narrow the powers - so amendments can now only be proposed where there is "any infringement of copyright by means of the internet [and the Secretary of State is] satisfied that (a) the infringement is having a serious adverse effect on businesses or consumers, and (b) making the amendment is a proportionate way to address that effect." There is also a new "super-affirmative" process proposed for adopting the new legislation, which is designed to make sure it receives a proper airing in both Houses of Parliament - even if that is something short of a full series of debates on new primary legislation.

Friday, 8 January 2010

We previously blogged that Bono had heralded the intervention of the movie industry as a potential savior for the ailing music industry, saying "Perhaps movie moguls will succeed where musicians and their moguls have failed so far, and rally America to defend the most creative economy in the world". Well, in true Christmas spirit, along came French President Nicolas Sarkozy with yet more Christmas cheer for Bono - a real secret Santa. In a speech at the Cite de la Musique in Paris, Sarkozy made it clear that he is actively supporting new proposals from a committee led by music producer and label boss Patrick Zelnik to tax Google and other search engines, web portals such as Facebook and French internet service providers such as Yahoo and AOL. The so called "Google tax" would be used to provide funding for the music and publishing industries – as well as funding ‘music cards’ for French music fans so they can legally buy music (and other content such as films and books) online, and this wqould be finacially supported by thre French Government too. In return, the French President seems keen that music sold must be able to be played ‘on all platforms’ which appears to be a reference to totally DRM free music. The French President also seems keen to investigate Google’s dominant position in online advertising as potentially anti-competitive.

Google France’s public affairs director, Olivier Esper, told Liberation that he hoped the government would "favour cooperation" and warned against "prolonging a path of opposition between the Internet world and the world of culture, for example, through the path of taxation". Christine Balague, , co-president of a French Internet think tank Renaissance Numerique said "Let's stop demonising the Internet, and let's look at the benefits provided by the Web" adding "Neither the online portals nor the Internet providers steal from artists. On the contrary, they participate in the emergence of new and innovative economic models.

Thursday, 7 January 2010

"The Director General of the World Intellectual Property Organization (WIPO) presents his compliments to the Minister for Foreign Affairs and has the honor to notify him of the deposit, on December 14, 2009, by the Government of the Republic of Malta of its instrument of accession to the WIPO Copyright Treaty, adopted at Geneva on December 20, 1996, as well as the deposit by the Council of the European Union and the Governments of the Republic of Austria, the Kingdom of Denmark, the Republic of Estonia, the Republic of Finland, the French Republic, the Federal Republic of Germany, the Hellenic Republic, Ireland, the Republic of Italy, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic, the Kingdom of Spain, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland, of their instruments of ratification of the said Treaty".

That's not all, though. Like Romeo and Juliet, Strawerries and Cream, Tom and Jerry and Minneapolis and St Paul, the WIPO Copyright Treaty is virtually inseparable from its non-identical partner, the WIPO Performances and Phonograms Treaty. By WPPT Notification No. 78 this blog notes that the same selection of jurisdictions has acceded or ratified that Treaty too. This notification however continues:

"The instruments of ratification of the Kingdom of Denmark, the Republic of Finland, the French Republic, the Federal Republic of Germany and the Kingdom of Sweden contained the following declarations, respectively:

- "in accordance with Article 3(3) of the WIPO Performances and Phonograms Treaty (WPPT), the Kingdom of Denmark declares that it avails itself of the faculty provided in Article 5(3) of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome Convention (1961)) in the sense that Denmark will not apply the criterion of publication in Article 5(1)(c) of the Rome Convention."

- "Pursuant to Article 3(3) of the Treaty the Republic of Finland avails itself of the possibilities provided in Article 17 of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome Convention) and refers to the notification made at the time of ratification by Finland of the Rome Convention, stating that it will apply, for the purposes of Article 5 of the said Convention, the criterion of fixation alone and, for the purposes of Article 16, paragraph 1(a)(iv), the criterion of fixation instead of the criterion of nationality."

- "The Government of the French Republic declares, in accordance with Article 3(3) of the WIPO Performances and Phonograms Treaty (WPPT), that it avails itself of the faculty provided in Article 5(3) of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome Convention of October 26, 1961), and that instead of the criterion of first publication it will apply the criterion of first fixation."

- "In accordance with Article 3(3) of the WIPO Performances and Phonograms Treaty (WPPT), the Federal Republic of Germany declares that it avails itself of the faculty provided in Article 5(3) of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations (Rome Convention (1961)) in the sense that it will not apply the criterion of fixation laid down in Article 5(1)(b) thereof."

- "The Kingdom of Sweden declares, in accordance with Article 3(3) of the WIPO Performances and Phonograms Treaty with reference to Article 5(3) of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, that Sweden will not apply the criterion of publication, with the exception of the reproduction right for phonogram producers."

So much for copyright in the European Union being a 'level playing field' ... However, both treaties enter into force, with respect to the European Union and the relevant Member States, on 14 March 2010.

nb The European Commission's welcome for these developments was recorded in a press release on 14 December 2009 (here), as previously recorded on this weblog.

Wednesday, 6 January 2010

The USA’s National Music Publishers Association (NMPA) has said that it has successfully settled its copyright infringement suit brought by members Peermusic, Warner Chappell and Bug Music against Motive Force and Sean Colombo, operators of the unlicensed LyricWiki database of song lyrics. Under the terms, Motive Force and Mr. Colombo will be permanently enjoined from further using unlicensed song lyrics on websites or applications, and will "turn over funds associated with the exploitation of the unauthorized content" saying that all unlicensed content had now moved to a licensed lyric website. The NMPA says that it’s continuing with its action against the alleged unlicensed use of lyrics against LiveUniverse and owner Brad Greenspan, the co-founder of MySpace.

Joel Tenenbaum, who was ordered to pay $675,000 for infringing 30 sound recordings after his jury trial in the USA, is to ask for a re-trial. Among other claims, lawyers for Tenenbaum say that the verdict was unconstitutionally excessive - the argument being that a penalty of $22,500 a song is “obviously unreasonable” – although it is of course well within statutory limits. The US Copyright Act allows penalties ranging from $750 to $150,000 per infringement at the jury’s discretion. Indeed the jury’s decision in the Tenenbaum case is not without precedent: in the USA’s first major file sharing claim, single mum Jammie Thomas-Rasset was ordered by a Minnesota court to pay $1.92 million for file sharing 24 songs.

Now Charles Nesson, Tenenbaum’s attorney and Harvard academic (pictured in a rather fetching turtle neck ensemble) wants U.S. District Judge Nancy Gertner to reduce the damages to the minimum $750 a song or give the Boston graduate student a new jury trial saying “Given the fact that Tenenbaum was one of many millions of people sharing music and that the plaintiffs have failed to show any actual damages from Tenenbaum’s particular actions, this award is obviously “so severe and oppressive as to be wholly disproportionate to the offense and obviously unreasonable”. It is fair to say that the Recording Industry Association of America (RIAA) has now wound down its high profile campaign to sue individual file sharers and downloaders, but this doesn’t detract from the fact that Tenenbaum was convicted on his own admission and the jury’s award well within statutory parameters. It seems likely that whilst the judiciary may be unhappy about the level of damages awarded in both these cases, it is unlikely to take a proactive role in reducing them – leaving this to Congress. As for Congress, as the movie, television and music industries continue to ask for greater protection, it seems unlikely that the legislature bow to pressure to reduce statutory penalties. Nesson is also asserting that Tenenbaum’s 2004 file sharing on Kazaa and Limewire was protected by the US fair use doctrine — a suggestion that online file sharing is permissible. In Tenenbaum’s Massachusetts trial Judge Gertner would not allow this defence to proceed and quite frankly it’s hard to see why this would be allowed to proceed in a second trial. Dowloading files without paying is surely never going to constitute ‘fair use’.

In fact it seems likely that countries will in all probability move to stregthen rather than loosen copyright protection. In the US, the RIAA, the Motion Picture Association of America and others are lobbying Congress and internet service providers to adopt a “three strikes” policy in which internet access would be cut off for repeated infringement. This legislation exists in Taiwan, in New Zealand and (nearly it seems) exists in France – and has been included by Business Secretary Lord Mandelson in the Digital Economy Bill which is in the committee stage the UK. This week U2 frontman Bono heralded the intervention of the movie industry as a potential savior for the ailing music saying that file swapping and sharing hurt the creators of cultural products. Bono argued “the only thing protecting the movie and TV industries from the fate that has befallen music and indeed the newspaper business is the size of the files” pointing out that “the immutable laws of bandwidth” indicate that technology is just a few years from allowing viewers to download entire movies in just a few seconds adding “A decade’s worth of music file-sharing and swiping has made clear that the people it hurts are the creators—in this case, the young, fledgling songwriters who can’t live off ticket and T-shirt sales”! Interestingly the singer pointed out that the US effort to stop child pornography and China’s effort to suppress online dissent indicate that it is “perfectly possible to track” Internet content and felt that the movie and TV industries may succeed where the music and newspaper industries have failed saying “Perhaps movie moguls will succeed where musicians and their moguls have failed so far, and rally America to defend the most creative economy in the world, where music, film, TV and video games help to account for nearly 4 percent of gross domestic product”.

ISP TalkTalk's head of regulation Andrew Heaney responded by telling reporters: "It is outrageous to equate the need to protect minors from the evils of child pornography with the need to protect copyright owners. As a society we have accepted that it is appropriate and proportionate to intrude on people's internet use by blocking access to sites that host child abuse images. To suggest that sharing a music file is every bit as evil as child abuse beggars belief" adding "Bono obviously does not understand how simple it is to access copyright protected content without being detected. P2P file-sharing can be spotted (albeit at great cost) but there are dozens of applications and tools out there which allow people to view content for free and no amount of snooping can detect it". ISPs currently argue that it would cost each and every ISP customer about £25 a year to reimburse ISP’s for tracking and stopping net piracy.

As already mentioned and discussed on this blog, Lord Lucas, a Tory back-bencher and one of the remaining elected hereditary peers, put down an amendment trying to introduce an offence of groundless threats. [Pictured right, the left-field.]

On closer inspection of the marshalled list of amendments which peers are debating this afternoon, this is not the only area in which Lord Lucas is seeking to make his mark. He has also put down a series of amendments introducing new Clauses to the Bill with the following headings [with added commentary from 1709]:

Format shifting [an unfettered right to format shift any copy you own]

Artists' right to re-market [work that is out of print etc]

Fees for retransmission and delayed transmission of copyright material [i.e. levies on retransmission of free-to-air broadcasts and on PVR viewing of those programmes - an idea that has been campaigned for long and hard by Steve Morrison, head of All3 Media and former Granada Media CEO (and almost nobody else)]

Implied licence to copy [no idea what this is about - anyone?]

Transfer of rights in exchange for equity or other rights in a business [a statutory right for authors to receive payments based on equity received by licensees of their rights, I think]

Compulsory licensing of recorded music to be made available via the internet [does what it says on the tin]

Protection of search engines from liability for copyright infringement [the noble Lord also has a nicely co-ordinating or matching amendment extending the protection of the e-commerce regulations to search engines, hyperlinkers and aggregators. This one, though widely opposed, has at least been the subject of bona fide academic debate]

It is unlikely that any of these amendments will be taken up by the government, but it did raise the question in my mind as to what change to copyright law, either following Gowers or otherwise, do 1709ers think it is most important to add to the Digital Economy Bill.

In this game of "phantom amendments" remember that to be considered, an amendment has to be within the "long title" of the Bill, which in this case is "a Bill to make provision about the functions of the Office of Communications; to make provision about the online infringement of copyright, about licensing of copyright and performers’ rights and about penalties for infringement; to make provision about internet domain registries; to make provision about the functions of the Channel Four Television Corporation; to make provision about the regulation of television and radio services; to make provision about the regulation of the use of the electromagnetic spectrum; to amend the Video Recordings Act 1984; to make provision about public lending right in relation to electronic publications; and for connected purposes."

While the Lords flick the ermine moult off the pages of the UK's Digital Bill this week, debate is hotting up about its potential impact on junior filesharers. In The Scotsman, earlier this week, John McGhee, an IT integration manager with Glasgow City Council, a principal teacher of pastoral care and a teacher of computing at Holyrood School, was lamenting the poor record of education about lawful internet use and the impact of filesharing on the creative industries.

"There's no national steer (aboveright) that this needs to be part of the curriculum," he says, "as you find when it's not nationally driven it's down to individual schools" said McGhee. "The challenge is to bring teachers up to speed and a confident level. You need a capacity for an ethical debate and a technical debate."

Not quite, Mr McGhee.

There has, in fact, been a significant "national steer". Following the UK's Gowers Review of Intellectual Property, in February 2008 the Department for Culture Media and Sport published From Margins to Mainstream: Creative Britain: New Talents for the New Economy. Recommendations included commitments to:

*Talent pathways to facilitate better informed and broader career choices

*Educational outreach to ensure academia is providing the right skills

*Introduction of intellectual property into the national curriculum

*Industry and academia building stronger links to bridge the gap in skills provision

*Greater emphasis on business and entrepreneurial skills as part of creative courses

Section 5 of January 2009's Digital Britain Interim report says: "The simple message at the core of this interim report is that we cannot afford to treat education and training for digital technologies as just another ‘vertical’ subject area. It underpins everything we do in the 21st Century. Successful, emerging economies have already embraced this message. We must do likewise.....Similarly, in education and training for digital life skills, we need a step change in approach, starting with the youngest. .....[There is] the need effectively to engage an entire generation growing up with the internet, multi-media formats and broadband. This starts with inspiring and innovative programmes and initiatives to engage a new generation of students and attract them into technology-inspired and creative careers."

Geoff Taylor, British Phonographic Industry chief executive, recently said the Digital Bill would be a welcomed addition to education projects, but more work was needed. "The creative industries have become a vital sector of the UK's economy, and if we are to continue that success and create more new and exciting jobs for young people, it is essential that we educate young people as to the value of ideas – whether their own or somebody else's. ......Both industry and government must do more to encourage greater respect for copyright and intellectual property in society."

The BPI can afford to make such statements. Along with bodies such as PRS for Music, private individuals working in the industry and a number of music publishers, the BPI made a contribution to the new teaching materials produced by, amongst other government Sector Skills Councils, the Creative and Cultural Skills Council. The Council has produced "a broad range of vocational qualifications for adults, and also more general qualifications for 14-19 year olds". This includes an on-line learning service, Creative Choices. The music teaching modules and materials cover in considerable details music recording, live music, music publishing, copyright law and music trade practices, collecting societies and their role and governance. Teachers throughout the UK would find these materials, that are available from CCSkills, valuable assets to help them put filesharing in its industry context for their students and to equip their charges for the real world of the creative and cultural industries. More modules from other Skills Councils are on the way.

Yesterday's Guardian featured an article ("Internet pirates find 'bulletproof' havens for illegal file sharing") by Bobbie Johnson, that newspaper's tech correspondent, which carries some useful pointers as to where file-sharers might choose to go for their holidays this summer. According to this article,

"Internet pirates are moving away from safe havens such as Sweden to new territories that include China and Ukraine, as they try to avoid prosecution for illegal file sharing ...

For several years, piracy groups that run services allowing music, video and software to be illegally shared online have been using legal loopholes across a wide range of countries as a way of escaping prosecution for copyright infringement.

In the last year there has been a significant shift, say piracy experts, as the groups have worked to stay beyond the reach of western law enforcement.

The change is rooted in the evolution of "bulletproof hosting", or website provision by companies that make a virtue of being impervious to legal threats and blocks. Not all bulletproof services are linked to illegal activities, but they are popular among criminal groups, spammers and file-sharing services.

Rob Holmes, of ... IP Cybercrime, ... said successful hosts were now starting to get stronger. "Some of the more popular ones have become more strongholds than they were previously," he said. "It's an industry and it always will be. When you think about it, bulletproof hosting is just a data version of money laundering."

Late last year a Swedish court found four men guilty of breaking copyright law through their links to the Pirate Bay website, ....

That decision prompted many piracy services to seek jurisdictions beyond the reach of western law. Pirate Bay moved its web servers to Ukraine, while another popular file-sharing service, Demonoid, which started in Serbia, also relocated.

"Before going completely dark in October [2009], Demonoid physically moved their servers to Ukraine, and remotely controlled them," said John Robinson, of BigChampagne, .... "Ukrainian communications law, as they paraphrase it, says that providers are not responsible for what their customers do. Therefore, they feel no need to speak about or defend what they do."

Not every controversial service has fled beyond traditional jurisdictions, however. Some problematic hosts still exist in the US, such as the infamous host McColo, which was based in San Jose, California, and remained in operation until last year.

Pirate Bay, after its brief excursion to Ukraine, is now run out of a Dutch data centre called CyberBunker, which is based in an old nuclear facility of the 1950s, about 120 miles south-west of Amsterdam.

Research published last year showed that most bulletproof hosts are located in China, where criminals are able to take advantage of low costs and legal loopholes to avoid prosecution.

Despite officials in Beijing talking in tough terms about computer crime – hacking potentially carries a death sentence in China – the authorities rarely co-operate with other countries to take action against hi-tech criminals. As a result, just a handful of firms in China are responsible for hosting thousands of criminal enterprises online. ...

Richard Cox of Spamhaus, a British organisation that watches spammers and monitors bulletproof hosts, said it was almost impossible to stop expansion of such services. "At the moment there are a number of individuals who are setting up bulletproof hosting sites in China," he said. "No matter how big a part of the Chinese network we block, the administrators there just do not care."

Not every controversial service has fled beyond traditional jurisdictions, however. Some problematic hosts still exist in the US, such as – the infamous host McColo, which was based in San Jose, California, and remained in operation until last year.

But the long-term impact of offshore hosting is becoming more problematic as investigators worldwide try to cut the links between criminal groups and protected internet servers.

One notorious gang of hackers, known as the Russian Business Network, ... started as a bulletproof host in St Petersburg but had connections to a wide range of criminal activities online. Widely known in the computer security community, it is being investigated by the FBI. The Russian authorities, meanwhile, have been keen to foster greater communication to stop the spread of criminal activity online.

Some are hopeful that greater co-operation between international governments will help prevent the development of new piracy havens, but others suggest that it is unlikely that a complete block on such activities will ever be possible.

"There will always be a place to run to," said Rob Holmes ... "Each time a law passes, or a new country creates some kind of stumbling block for them, they'll always find another place to do this. It goes back to the speakeasies in the 1920s – when one place got busted, they would just congregate in another place."

It can be argued that bulletproof havens are a positive step when viewed in broad terms: they are a sign that diplomacy, economic pressure and other measures can at least be targeted at the havens themselves, which can be worked on individually with a view to their cooperation. This is not much consolation to IP rights owners, however, since it is their rights which cannot be enforced.

Friday, 1 January 2010

Three hundred years ago clocks ticked over from 31 December 1709 to 1 January 1709 (New Year’s Day being 25 March). Even today the transition to 1 January might be less than dramatic. For many copyright works 1 January is the first day of life in the public domain, but does that mean they’re suddenly all fair game?

Copyright-generating individuals who passed away in 1939 include W. B. Yeats, Sigmund Freud, Arthur Rackham and American Western author Zane Grey. They must be experiencing a sense of déjà vu as they enter the UK public domain, having previously done so in 1990. But is this really it? Balloons released into the sky, they may yet get snared on some branch. Copyright works have more lives, it seems, than cats...

1. Original copyright term.2. Revived copyright term.3. Works published posthumously (Zane Grey left a stockpile of manuscripts that were published for many years after his death).4. Copyright continues in countries beyond the UK, such as many US works (Zane Grey).5. The original work is out of copyright but the adaptation isn’t (translation of Freud).6. Material around the work is still in copyright – text accompanying Rackham’s illustrations, editorial matter (notes for Yeats or Freud) or the book jacket. The presentation of the work may be in copyright (typography).7. Material within the work is still in copyright (Yeats literary criticism).8. It isn’t in copyright but you still have to pay a royalty (text of Peter Pan illustrated by Rackham).9. It isn’t in copyright but is protected by another IP right – e.g. a trade mark or a database right (Yeats poetry anthology?).10. It isn’t in copyright but you can’t copy it because either you can’t get past the DRM or it’s in a physical place you can’t access like an art gallery with a no photography policy.

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